Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

What would you like to follow?

It has been about a month since the last earnings report for Apogee Enterprises (APOG - Free Report) . Shares have added about 9.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Apogee Enterprises due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Apogee Q4 Earnings & Revenues Miss Estimates, Down Y/Y

Apogee has reported adjusted earnings per share of 85 cents in fourth-quarter fiscal 2019 (ended Mar 2, 2019), which declined 11.5% year over year. The reported figure also missed the Zacks Consensus Estimate of 91 cents.

Apogee generated revenues of $346 million, down 2% year over year. Also, the revenue figure missed the Zacks Consensus Estimate of $357 million.

Operational Update

Cost of sales in the reported quarter was up 13% year over year to $302 million. Gross profit slumped 48% year over year to $44 million. Gross margin came in at around 13% compared to 24% recorded in the year-ago quarter.

Selling, general and administrative (SG&A) expenses flared up 2% year over year to $59 million. Adjusted operating income declined 8.4% year over year to $31 million. Operating margin in the quarter was 9.0% compared with 9.6% in the prior year quarter.

Segment Performance

In the fiscal fourth quarter, the Architectural Framing Systems segment’s revenues went down 7% year over year to $170.6 million. The segment’s adjusted operating income plummeted 37% year over year to $9 million.

The Architectural Glass Systems segment’s revenues were up 13% year over year to $103.7 million. The segment’s adjusted operating income was up 3.3% year over year to $7.3 million.

Revenues in the Architectural Services segment was down 2% year over year to $66.3 million. The segment reported an operating profit of $9 million, reflecting a 44% year-over-year jump backed by the completion of large number of projects and lower costs.

The Large-Scale Optical Technologies segment’s revenues climbed 2% year over year to $24 million. Operating income in the reported quarter was up 3% year over year to $7.2 million.

Backlog

The Architectural Framing Systems segment’s backlog increased slightly to $408.5 million in the reported quarter compared with $407.9 million a year ago. The Architectural Services’ segment backlog came in at $444 million — an improvement from $426.3 million in the prior-year quarter.

Financial Position

Apogee had cash and cash equivalents of $29.2 million at the end of the fiscal fourth quarter compared with $19.3 million as of the end of the prior-year quarter. The company generated cash flow from operations of $96.4 million in fiscal 2019 compared with $127 million reported in fiscal 2018. Long-term debt was $245 million as of Mar 2, 2019, compared with $216 million as of Mar 3, 2018.

During the quarter under review, the company repurchased 657,983 shares for $20 million. In fiscal 2019, Apogee returned $61.2 million of cash to shareholders through share repurchases and dividend payments — a 22% increase from fiscal 2018.

FY19 Performance

Apogee’s adjusted earnings came in at $2.96 per share in fiscal 2019, which missed the Zacks Consensus Estimate of $3.07. Earnings declined 8% year-over-year. Including special items, earnings came in at $1.63 per share for the fiscal, down from the prior fiscal’s $2.76.

Revenues for the fiscal increased 5.8% year over year to $1.40 billion from $1.33 billion in fiscal 2018. The topline figure, however, lagged the Zacks Consensus Estimate of $1.41 billion.

Fiscal 2020 Guidance

For fiscal 2020, Apogee expects revenue growth to be between 1% and 3%, with growth in three of the company’s segments, partly offset by a decline in Architectural Services due to execution schedules for backlog projects.

Apogee anticipates operating margin of 8.2-8.6%, with margin improvement in Architectural Glass and Architectural Framing Systems. However, margins are expected to negatively impacted by start-up costs related to the strategic growth investment in Architectural Glass as well as increased corporate costs from higher legal expenses.

The company projects adjusted earnings per share of $3.00-$3.20 and capital expenditures in the band of $60-$65 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -23.22% due to these changes.

VGM Scores

Currently, Apogee Enterprises has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Apogee Enterprises has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Resources

Client Support

Follow Us

Zacks Mobile App

Zacks Research is Reported On:

Yahoo

MSN

Marketwatch

Nasdaq

Forbes

Investors.com

Morningstar

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Verizon Media; Microsoft Corporation; Nasdaq, Inc.; Dow Jones & Company; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +25.08% per year. These returns cover a period from January 1, 1988 through March 4, 2019. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

Visit performance for information about the performance numbers displayed above.

We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms and Conditions of Service.